Although lung disease is a major cause of morbidity in children, the forced breathing maneuvers required for assessing disease, spirometry, cannot be performed by young children. Thus, characterizing the activity or monitoring the severity of pediatric lung disease in younger children is primarily qualitative, based upon parental reports, with little quantitative information upon which to base treatment decisions. Equally important, it is difficult to perform clinical trials in young children with lung disease in the absence of a quantifiable outcome measure. Hyperpolarized helium-3 (HHe) magnetic resonance imaging (MRI) is an exquisitely sensitive, versatile, and quantitative modality for tomographic (3D) mapping of pulmonary functional microstructure with excellent resolution. The Apparent Diffusion Coefficient (ADC), an imaging biomarker for alveolar length-scales, can determine the stage of prematurity and/or assess injury to septal walls associated with chronic lung disease of prematurity, also known as bronchopulmonary dysplasia (BPD). Because HHe MRI is non-ionizing, infants and children stand the most to benefit from this newly emerging diagnostic modality. During Phase I we developed and demonstrated new devices, methods, and technology and acquired HHe MRI images from eleven free-breathing, unsedated infants between the ages of nine months and three years, establishing feasibility for imaging without voice inhalation and breath-hold commands. For Phase II we propose clinical studies, technical refinements, and regulatory filings that will advance HHe MRI towards a New Drug Application. In Aim#1 we will conduct a simple longitudinal trial, recruiting eight preterm infants with BPD. We will perform the first imaging session in the NICU and image again at six months corrected gestational age. We will also recruit a cohort of eight full-term infants, and image at one and six months. This second cohort will serve as an age-matched comparator for normal development of alveolar dimension. We will investigate the hypothesis that HHe MRI diffusion-sensitive imaging is a sensitive and specific assessment of alveolar dimension in neonates, distinguishing abnormal from normal and stratifying severity. In Aim#2 we will refine the infrastructure technology and establish a final specification for all essential components and methods required for neonatal lung function assessments including the HHe polarizer, gas administration device(s), neonatal-sized chest coil, fast spiral imaging pulse sequences, and data analysis software. In Aim#3 we will submit regulatory filings for FDA advancement of HHe as a diagnostic drug agent for assessments of lung functional microstructure in neonates. We will also submit regulatory filings to advance the case for FDA approval of our devices for the NICU. BPD is considered an orphan disease, which eases the regulatory burden for approval of HHe as a New Drug for this disease population.